Recent data from the China Iron and Steel Association shows that crude steel production in early April hit a record high, with an estimated output of 2.2139 million tons in the first half of the month. This surge is accompanied by a significant increase in the proportion of hot-rolled coil (HRC) products, which reached a new high of 14.978 million tons in March.
Despite the arrival of May, the market for hot-rolled coils continues to face challenges due to slow recovery in downstream demand. The expected inventory reduction has not yet started, and the capital market remained weak throughout April, causing a sharp drop in coil prices. Prices in first-tier cities have hit a yearly low, confirming analysts' earlier predictions that spot prices for HRC would decline in March and April. However, the recent trend suggests a slight upward movement this month, though the room for growth remains limited.
Industry analysts have observed a negative correlation between steel mill order rates and steel price fluctuations. In the first quarter of last year, as steel prices rose, the order rate of mills declined. Following a peak in April and August, prices fell again, and the order rate continued to decrease. A rebound in steel prices during September to December was driven by positive market sentiment, but the order rate still dropped over time.
This month, the order rates for hot-rolled coil resources in Tianjin's steel market, including those from Tanggang and Shougang, have both declined. Shougang’s order rate dropped by 30 percentage points, while Tangshan Steel saw a 10-point decrease. Based on the inverse relationship between order rates and steel prices, it is expected that HRC prices will rise slightly compared to April. However, given that Shougang’s order rate was 55% in March and Tangshan Steel’s was 80%, the current pressure on resource circulation is similar to that of March. As a result, it’s unlikely that prices will surpass those seen in March.
Last year, the flow ratio between HRC resource regions decreased, and information transparency played a key role in price fluctuations. In the northern region, price changes in Tianjin and Chongqing often led national trends. Therefore, analyzing the Tianjin market provides a clear picture of the broader HRC market dynamics.
The average order volume for hot-rolled coils across five northern steel mills—Shougang, Tangshan Iron and Steel, Handan Iron and Steel, Anshan Iron and Steel, and Benxi Iron and Steel—was 71% this month, down 9 percentage points from April. While this indicates lower supply pressure than in April, it is still 10% higher than in March. As a result, the volume of HRC sold this month is expected to be less than in April but more than in March.Wallpaper Roller,Best Wallpaper Roller,Wallpaper Roller Brayer,Wallpaper Corner Pressing Roller
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